All right. I've done a deep dive into the job numbers here, because they didn't make sense. Why would state and local government + health care be carrying the jobs report? And here's what I've found out:
1. I thought the health care sector would be down because of the knock on effects from the NIH cuts. I can't find any evidence to support that. So I guess the 40K there is a legit number. Of course, this type of workforce gain is a double edged sword, in that it creates temporary employment but there's no investment value, but regardless.
Now, hospitals are the biggest category of hiring. Let's see what will happen with medicaid cuts. These job gains could be illusory. But this line checks out.
2. "Education" gains seem to be illusory. They are all functions of seasonal adjustments. Education employment actually **WENT DOWN** but by less than it usually does in the summer. So the seasonal adjustment made it seem like a gain. I don't know why jobs would be higher in education this summer as opposed to last.
We have a lot of educators here. Any ideas? I mean, federal assistance is set to drop considerably. Why would they keep people employed?
3. The next biggest line item is "Individual and family services." This is where I drilled deeper and found what's happening here. The funding available under a federal statute called FFPSA has been untouched -- unlike most federal assistance programs. So there's more money there. And FFPSA money is mostly about placement in foster care and follow-up checks.
This increase is almost surely related to deportations. They are deporting parents, leaving kids, and thus way more foster care services will be needed. I am guessing that the funding for these organizations is renewed annually, probably in June? This suggests to me that states and localities are either having a surge in orphans or are expecting ones.
So this category of job increase should be viewed as a negative, not a positive. It's almost surely not going to continue.
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